This AR/VR Startup Idea from the 1001 Startup Ideas collection of YoStartups is for Shopping Experience Enhancement Through AR/VR. This will enable the offline retailers to create a better experience for their walk-in customers by leveraging technologies like Augmented & Virtual Reality, making it easier for them to explore the store.
Market Definition for Shopping Experience Enhancement Through AR/VR
Breaking one of the myths about the millennials shopping preference, a study done by OpinionLab finds that, digitally savvy millennials are the only generation that prefers shopping malls over shopping carts despite their penchant for technology. The survey which polled 1103 consumers, found that 37% of millennials (defined as adults between ages 18 and 29) would rather shop at the mall, while only 27% would rather shop online, and rest preferred the mix of both offline and online.
In another survey by TimeTrade research, 85% of the consumers say they prefer to shop in physical stores, and if given the opportunity, 71% of consumers would even prefer to shop at an Amazon store over Amazon.com. Most consumers (85%) say they prefer to shop in stores because they like to touch and feel a product before making the purchase decision. More than one-third of the respondents (36%) also said they don’t like waiting for items to ship and 30% like to receive advice on what products they should purchase.
According to a 2016 report from Deloitte, 84 percent of customers reported using a digital source for shopping-related activities before or during their most recent visit to a brick-and-mortar store. (Perkins, 2016) This research shows that using AR for navigation around the store, product selection, purchase and checkout and product usage, shoppers can finally take the convenience of online shopping instore.
Competitor Analysis for Shopping Experience Enhancement Through AR/VR
Augmented and Virtual Reality experiences are becoming more inclusive in our everyday life with the higher adoption of smartphones, AR/VR headsets, and wider availability of content. Real Estate is not untouched, as we are already seeing many companies making use of Virtual Reality in property listing platforms and construction & retrofitting projects.
One such company which is specifically working towards enriching the offline retail shopping experience is New York-based Obsess. Obsess is a platform that enables brands and retailers to create Augmented and Virtual Reality shopping experience for mobile users. Using the Augmented Reality, their product enriches the overall in-store shopping experience to deeply engage customers and increase sales.
Another company Hash Media, which is headquartered in Ahmedabad, India, has developed “Virtual Mirror” as one of its AR offerings. This is a technology that allows customers to try out different clothes and accessories using Augmented Reality. The technology can be used for both offline and online stores, making the purchasing decision easier for the customers.
Pain Point & Target Audience for Shopping Experience Enhancement Through AR/VR
The target audience for the proposed startup would be offline retail stores and shopping complexes.
With the rise of e-commerce, retail stores are facing a tough challenge to attract customers and keep up their sales number to meet their high operating costs. Also, the retail store is no longer about stocking items on the shelves and waiting for the customers to come through the front door. Now more than ever customers demand personalized, enriched and convenient shopping experience, and the stores have to upgrade themselves to stand out from the crowd and attract their prospective customers.
Value Proposition for Shopping Experience Enhancement Through AR/VR
The proposed startup will help offline retail stores to transform their regular store into an AR-enabled store where customers can digitally interact with in-store merchandise through their phones. Using the AR application, customers would be able to navigate through the store looking for a specific product, get reviews about the selected product and also get to try the products virtually without having to queue for the trial rooms.
The AR solution will also guide and recommend customers about different product segments and available offer and discounts. With this overall digital transformation, the in-store shopping experience will be more seamless, enriched and entertaining.
Business Model for Shopping Experience Enhancement Through AR/VR
The startup will work with retail stores and shopping malls on a SaaS-based subscription model. There will also be one-time set-up fee for transforming the regular store to AR-enabled space and after that a regular subscription fee based on cloud storage needed.
Way to market for Shopping Experience Enhancement Through AR/VR
The startup should first choose a retail segment where the application fits the most and make the first version of the product specifically for the segment. One of the segments that can be considered is multi-brand fashion retail. They are in constant need to create an enriched experience for their customer; also they have multiple brands and it often confuses the customers with the problem of plenty.
Once the product is developed and tested for the first retail segment, then the startup should start venturing in other retail segments.
Milestones for this AR Startup Idea
The startup should target to complete the product development and testing in first 4-6 months. Post which the startup should pilot the product with the few chains of retail stores in the selected segment to further fine-tune the product. The overall refinement should be complete within 12-18 months.
Investment Needed For Prototyping this AR Startup Idea
The startup should look to raise upto $75k for the product development and initial market testing & validation. The startup can look to partner with one of the retail chain and develop the initial version of the product in collaboration with the retailer in exchange for equity investment.
Team Capability for this AR Startup Idea
The founding team must have full stack developer and 3D designer for AR/VR. The 3D designer must have in-depth knowledge of 3D production pipeline, including modeling, texturing and rendering and associated programs. Other team members with prior experience of working in the retail industry would be helpful in business development and get customers onboard.
Investors / Expert Take for AR/VR Shopping Experience
AR/VR has been the hotshot in the investment community with more than $3 billion being invested during 2017, half of which was just on Q4 alone. “Based on our deep institutional knowledge of mobile/AR/VR hardware and software, we are excited to further the ecosystem and have committed to a smart glasses future with the investment such as Magic Leap. Mobile AR and CV/ML are strong interests for us, from seed through late-stage investments,” says Richard Tapalanga, Director, Qualcomm Ventures.
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